China Press Review – October 11, 2018

Press review

The US trade war against China is bound to fail: panellists
Keynote speakers at the South China Morning Post’s China Conference remain optimistic the world’s two superpowers will find a resolution, as ‘everybody will feel the pain’ if the tit-for-tat tariffs continue

China’s “nuclear option” in the US trade war isn’t much of a threat
But does the White House have the upper hand? A recent New York Times column by Andrew Ross Sorkin points out that China does have a “nuclear option” in its arsenal: US Treasuries. This scenario would involve ”the Chinese, the biggest holder of United States foreign debt with more than $1 trillion, publicly taking a step back from buying United States Treasuries—or worse, dumping what they own in the open market.”

Alfred Dunhill awarded 10 million yuan in ‘groundbreaking’ trademark infringement case against Chinese clothing firm Danhuoli
Court ruling said to strengthen China’s growing reputation for intellectual property rights protection

IMF chief Lagarde dismisses idea Beijing is manipulating the yuan as Washington turns up the heat
Christine Lagarde says the yuan’s decline of 10.5 per cent against the greenback since February ‘has a lot to do with the strength of the dollar’

Yuan falls as PBOC sets mid-price at lowest in 19 months
Offshore yuan traded by international investors drops 0.23 per cent to 6.9407 in early trade

China is seeking a stable solution to its economic slowdown, not the quick fix of a stimulus package
Aidan Yao says Beijing won’t revisit its past policy of pumping money into the economy at the expense of long-term sustainability. This time, it is using monetary tools more carefully and also restructuring the income tax system

China should prepare ‘more powerful’ steps to support economy: state media
China should prepare “more powerful” policy measures, possibly including a large-scale stimulus package, to prevent its economy from stalling as trade frictions with the United States persist, a state-backed tabloid said in a commentary on Thursday.

Is China Breaking? Some Evidence And Potential Implications
A business conditions index out of China just registered a severe 2-month drop, most notably in September after a moderate drop in August. The professor analyzing the data had negative points to make about the survey’s implication for China’s economy. Details of the survey are reviewed, with some observations about prior challenging periods for the US and global economy and markets.

US-China tensions make Asian free-trade deal ‘a priority’
Talks on the Regional Comprehensive Economic Partnership take on renewed urgency in the wake of Trump’s protectionism, says Malaysia’s top trade negotiator

Canada should choose free trade with China, not US protectionism – Beijing
Chinese foreign minister Wang Yi proposes China-Canada free trade zone to Canadian counterpart and condemns attempts to isolate China on trade

Beijing ‘looking into joining trans-Pacific trade pact’ to hedge against US
Officials are exploring the possibility of China becoming a member of the CPTPP, source close to the government says

China-SE Asia’s cultural ties are as binding as economic ones
Building infrastructure, as in the Belt and Road Initiative, only goes so far in bringing the region together. But strengthening cultural ties can be a way of investing in integration, too, says a former UN under-secretary-general

The China-Europe Disconnect
Misunderstandings threaten to derail stronger Sino-European relations. There is a great opportunity at present for the fostering of stronger relations between China and Europe, but going by these recent incidents the two sides will need to considerably improve their understanding of each other for this to happen.

Chinese firms may face more competition for overseas deals
State-backed companies are also expected to be more cautious as investments are put under tighter scrutiny, report says

China central bank chief meets Mnuchin amid trade tensions, stock plunge
US Treasury Secretary quoted as saying his department was monitoring currency issues “very carefully”, noting the renminbi had fallen “significantly” this year

BMW to buy control of China venture in ‘new era’ for foreign carmakers
Germany’s BMW (BMWG.DE) will pay 3.6 billion euros ($4.2 billion) to take control of its main joint venture in China, the first such move by a global carmaker as Beijing starts to relax ownership rules for the world’s biggest auto market.

Public anger in China spreading as property prices drop
Sales are usually brisk at this time of year, but so far the figures are grim – and people who’ve already bought are protesting against price cuts

Chinese investment in Europe is increasing
The region accounted for a quarter of China’s FDI outflows in 2017

China taps brakes on outbound investment, betrays capital flow fears
China is suspending approvals for a niche overseas investment product in Shanghai known as the QDLP scheme and urging licence holders, such as JPMorgan Asset Management and Aberdeen Standard Investments, to be “low profile” in marketing it, sources said

China ‘may lose foreign investment to other countries’ in trade war
Beijing should be alert to the risk of firms relocating, trade advisers and observers warn

Hopes for a Chinese cash cow in France milk country sour
French farmers fear for future of dairy plant once billed as China’s largest foreign investment in the milk processing sector

China Should Consider Launching its Own Stablecoin, Central Bank Expert Says in Op-Ed
The Chinese government should consider launching its own yuan-backed stablecoin despite the current ban on cryptocurrencies, an op-ed in Chinese financial journal CN Finance reports Tuesday, Oct. 9.

China’s New State Administration for Market Regulation: A Primer for Foreign Investors
The pre-reform and post reform regulators responsible for market controls are explained below.

Chinese coal city Datong to set up ‘no-coal zones’ amid pollution battle
Restrictions will include bans on storing, selling and direct combustion

China must power through energy price reform
China is determined to assign the market a decisive role in allocating natural resources. To that end, getting energy prices right is crucial. Since 1984, China has made great efforts to reform energy prices. But such reforms are far from complete.

China must power through energy price reform

Malaysian economic affairs minister Azmin Ali says region has ‘genuine admiration’ for China’s growth – but is concerned about militarisation of the disputed waterway

The cold war had hot wars in Korea, Vietnam and Cambodia and a nuclear stand off in Cuba – comparing it to today’s situation ‘would be hysterical’, Post’s China Conference hears

FBI chief tells US Congress that China poses bigger security threat than Russia
In a separate report, a congressional commission urged the Trump administration to challenge Beijing on human rights

Tesla Close To Securing $145M Plot For China Factory
Tesla Inc. is in the process of securing a land worth RMB1 billion (US$145 million) in Shanghai for its first factory outside of the U.S., setting up a beach head in the world’s largest electric vehicles market.

Tesla Close To Securing $145M Plot For China Factory

China’s Huawei Launches Self-Developed AI Chips To Boost Cloud Computing Business
Huawei Technologies Co., Ltd., world’s largest telecom-equipment maker, unveiled two new artificial intelligence (AI) chips on Wednesday that will power its servers and boost its nascent cloud-computing business.

China’s Huawei Launches Self-Developed AI Chips To Boost Cloud Computing Business

Tencent In Talks To Raise Over $650M For New VC Fund
Chinese gaming and social media giant Tencent Holdings Limited is in talks to raise a new U.S. dollar-denominated fund of at least US$650 million, earmarking for its existing start-ups in the company’s investment portfolio.

Tencent In Talks To Raise Over $650M For New VC Fund

A Start-Up Explores Opportunities In Monetizing China’s “Pet Economy” Via WeChat
China’s pet economy is estimated to be around RMB170 billion (US$25 billion) in 2018. With an expected 10-year compound annual growth rate of 32.8% and low penetration among the Chinese populace, strong market growth is expected and entrepreneurs are taking actions.

Chinese startup Meituan’s IPO marks comeback for founder
Food delivery unicorn aims for $4.2bn listing in Hong Kong amid struggles

The Chinese Ambition
On the Left there is a decades-long debate about how to characterise China – is it still a socialist country, has it restored capitalism?

Fan Bing Bing’s International Business Lesson
Even if Fan Bingbing hasn’t done a single thing wrong (which is very possible), it wouldn’t be surprising to learn that tax evasion is rampant in the film business. Tax evasion is like a national sport in China. Mainland factories regularly misreport income by having payments go to a Hong Kong or Taiwanese holding company. So-called “independent contractors” in China rarely report their income because they and their foreign employer are both operating illegally. And the billion-dollar daigou business is profitable largely through tax and customs fraud.

Fan Bing Bing’s International Business Lesson

Alain Gillard
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